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Bank of England Hikes Interest Rates to 0.5% in Push to Tame Inflation

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The Bank of England votes to hike UK interest rates to 0.5% as it responds to the soaring inflation rate.

Source: Bank of England

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The Monetary Policy Committee voted a majority, 5-4, in favor of increasing the Bank Rate to 0.5%, with four members supporting a further increase to 0.75%.

Andrew Bailey Governor BoE cautioned that the UK’s households are facing a lot of pressure, including households unable to afford rising costs.

Bailey further stated that the MPC observes that if the economy grows broadly in line with the February report’s central protection, some additional modest tightening of monetary policy is likely to be appropriate in the coming months.

The Committee also voted unanimously for BoE to start reducing the stock of UK government bond purchases, funded by the issuance of central bank reserves by halting reinvestment of maturing assets.

The MPC also resolved for the Bank of England to start reducing the stock of sterling non-financial investment-grade corporate bond purchases.

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